Colorado's TABOR refund depends on whether the state collects more revenue than the law allows
A TABOR refund happens only when Colorado's general fund revenue exceeds the limit set by the Taxpayer Bill of Rights. That limit is the prior year's revenue plus population growth and inflation. If actual revenue comes in higher, the state must return the overage to taxpayers — it cannot keep or spend the surplus.
Whether 2025 brings a refund depends on how much money Colorado actually collects in 2024 and early 2025, compared to what the formula allows. The state's Legislative Council staff produces revenue forecasts several times per year, and those forecasts drive the decision. As of now, no refund has been announced for 2025, but the final information comes in the spring when actual revenue numbers are known.
Key Takeaways
- A TABOR refund occurs only if Colorado's general fund revenue exceeds the constitutional limit, which is based on the prior year's revenue plus population growth and inflation.
- The state does not decide whether to issue a refund — the law requires it if revenue is over the limit, and forbids it if revenue is under.
- Revenue forecasts change throughout the year, so the possibility of a refund can shift between spring, summer, and fall projections.
- If a refund is issued, it typically arrives in the fall following the fiscal year in which the overage occurred.
- The refund amount and method (direct payment, income tax credit, or other means) are decided by the Colorado legislature, not predetermined.
How the TABOR revenue limit actually works
The limit is calculated each year using a specific formula: take the prior fiscal year's general fund revenue, multiply it by one plus the rate of inflation, and multiply that result by one plus the percentage change in Colorado's population. That product is the maximum the state can keep in its general fund for the current year.
Colorado's fiscal year runs from July 1 to June 30. So the limit for fiscal year 2025 (July 2024 through June 2025) was set using 2024's actual revenue, the inflation rate, and population change. If the state collects more than that limit allows, the overage must be refunded. If it collects less, no refund occurs — the state straightforward keeps what it takes in.
This is not a discretionary decision. The law does not give the legislature the option to keep the money or spend it on schools or roads. If revenue exceeds the limit, a refund is mandatory. The only choice the legislature has is how to return the money: as a direct rebate, as a credit against income taxes, or through another method.
Revenue forecasts and when the decision becomes final
The Colorado Legislative Council staff publishes revenue forecasts in November, March, and June of each year. These forecasts estimate how much money the state will collect and whether that amount will exceed the TABOR limit. Early forecasts are rough; later ones are more accurate because actual revenue data from earlier months is known.
The November 2024 forecast will give the first real signal about whether a 2025 refund is likely. If that forecast shows revenue tracking below the limit, a refund becomes unlikely. If it shows revenue on track to exceed the limit, the possibility grows stronger. The March 2025 forecast will be more reliable, and the June 2025 forecast will be nearly final.
The actual information happens after the fiscal year ends on June 30, 2025. The state auditor certifies the final revenue numbers, and if they exceed the limit, the legislature must act. Historically, refunds have been issued in the fall following the fiscal year in which the overage occurred — so a 2025 fiscal year refund would likely arrive in fall 2025.
What happened with recent TABOR refunds
Colorado issued TABOR refunds in 2022 and 2023. The 2022 refund was $750 per household, issued as a tax credit. The 2023 refund was $1,500 per household, also issued as a tax credit. Both were the result of revenue exceeding the constitutional limit during those fiscal years.
The 2024 fiscal year (ending June 30, 2024) did not produce a refund. Revenue came in below the TABOR limit, so no overage existed to return. This shows how the refund is not automatic or may provide — it depends entirely on whether the state collects more than the formula allows in any given year.
Factors that affect whether a refund is likely
Colorado's revenue depends on income tax, sales tax, and other sources. Strong employment and wage growth increase income tax revenue. High consumer spending increases sales tax revenue. Conversely, a slowdown in either area reduces revenue. The state's population growth also matters — faster growth increases the TABOR limit, making it harder to exceed.
Economic forecasts for 2024 and 2025 will shape whether revenue stays below, meets, or exceeds the limit. If the national economy slows, Colorado's revenue may fall short. If growth continues, revenue may climb above the limit. The Legislative Council staff's forecasts will reflect their best estimate of these conditions.
How to learn about a refund is coming
The Colorado Department of Revenue and the Legislative Council staff both publish information about TABOR refunds. The Legislative Council's revenue forecasts are public and updated three times per year. If you want to track the likelihood of a 2025 refund, check those forecasts in November 2024, March 2025, and June 2025.
Once the fiscal year ends and the state auditor certifies final numbers, the Department of Revenue will announce whether a refund is required. If one is issued, the department will provide details about the amount, the method of payment, and the timeline for distribution. News outlets in Colorado also cover TABOR refund announcements.
What happens if a refund is issued
If the legislature determines that a refund is required, they decide how to distribute it. Recent refunds have been issued as income tax credits, meaning the amount reduces your state income tax liability. Some refunds have been issued as direct payments to households. The method can vary depending on what the legislature chooses and what is administratively feasible.
The refund amount is not fixed — it depends on how much the revenue overage is. A larger overage means a larger per-household refund. The legislature also decides who receives the refund. Historically, TABOR refunds have gone to households that filed Colorado income tax returns, though the exact rules can change.
Frequently Asked Questions
Can I do anything to make sure I get a TABOR refund if one is issued?
If you are a Colorado resident and file a state income tax return, you are already in the system to receive a refund if one is issued. You do not need to take any action. If you do not normally file because your income is below the threshold, you may need to file to receive a refund, depending on how the legislature structures it. Check the Department of Revenue's announcement when a refund is confirmed.
What if I moved out of Colorado during the year the refund is issued?
may be able to access typically depends on whether you were a Colorado resident during the fiscal year in which the overage occurred. If you moved out after that year ended, you may still be may be able to access. The exact rules are set by the legislature when they authorize the refund. The Department of Revenue will publish those rules in their announcement.
Is a TABOR refund the same as a tax return refund?
No. A TABOR refund is a constitutional requirement that the state return money it collected above its legal limit. A tax return refund is money you overpaid in taxes during the year. They are separate. You can receive both in the same year, but they come from different sources and are calculated differently.
When will Colorado announce whether a 2025 refund is happening?
The first strong signal comes from the November 2024 revenue forecast. A more reliable picture emerges from the March 2025 forecast. The final information happens after June 30, 2025, when the state auditor certifies actual revenue. An announcement typically follows within weeks, with refunds distributed in the fall.